Seema Verma

Mattie Quinn, in governing.com, reports on the debate over how much freedom the Trump administration should give the states to change their healthcare systems. More flexibility, she notes, would make it easier to adopt healthcare industry-backed changes — and let conservatives enact policies rejected by the Obama administration.

Among her observations:

“Advocates of greater flexibility are likely to find an ally in Seema Verma, the new administrator of the federal Centers for Medicare and Medicaid Services (CMS). Verma was an architect of Indiana’s system. In a 2013 congressional hearing, she described the Medicaid bureaucracy as a set of ‘rigid, complex rules’ that have ‘created an intractable program that does not foster efficiency, quality or personal responsibility.”’

“But as veterans of efforts to streamline government bureaucracy and improve program efficiency know all too well, there are always going to be up-front costs. Health policy experts worry that the kind of large, across-the-board cuts to Medicaid funding being proposed in Congress would work against the kind of flexibility initiatives that appeal to the program’s state administrators.”

After the Senate fell short in its effort to repeal the Affordable Care Act, the Trump administration is poised to use its regulatory powers to accomplish what lawmakers could not: shrink Medicaid.

President Trump’s top health officials could engineer lower enrollment in the state-federal health insurance program by approving applications from several GOP-controlled states eager to control fast-rising Medicaid budgets.

Indiana, Arkansas, Kentucky, Arizona and Wisconsin are seeking the administration’s permission to require adult enrollees to work, submit to drug testing and demand that some of their poorest recipients pay monthly premiums or get barred from the program.

Maine plans to apply Tuesday. Other states would likely follow if the first ones get the go-ahead.

Josh Archambault, senior fellow for the conservative Foundation for Government Accountability, said absent congressional action on the health bill “the administration may be even more proactive in engaging with states on waivers outside of those that are already planning to do so.”

The hope, he added, is that fewer individuals will be on the program as states figure out ways “to transition able-bodied enrollees into new jobs, or higher-paying jobs.” States need to shore up the program to be able to keep meeting demands for the “truly needy,” such as children and the disabled, he added.

To Medicaid’s staunchest supporters and most vocal critics alike, the waiver requests are a way to rein in the $500 billion program that has undergone unprecedented growth the past four years and now covers 75 million people.

Waivers have often been granted in the past to broaden coverage and test new ways to deliver Medicaid care, such as through private managed-care organizations.

But critics of the new requests, which could be approved within weeks, said they could hurt those who are most in need.

The National Health Law Program “is assessing the legality of work requirements and drug testing and all avenues for challenging them, including litigation,” said Jane Perkins, the group’s legal director.

The administration has already said it favors work requirements and in March invited states to suggest new ideas.

Before taking the top job at the Centers for Medicare & Medicaid Services, Seema Verma was the architect of a Kentucky waiver request submitted last year.

Not all states are expected to seek waivers, because Medicaid enjoys wide political support in many states, particularly in the Northeast and West.

Medicaid, the nation’s largest health insurance program, has seen enrollment soar by 17 million since 2014, when Obamacare gave states more federal funding to expand coverage for adults. It’s typically states’ second-largest expense after education.

This year, Senate and House bills tried to cap federal funding to states for the first time. Since the program began in 1965, federal Medicaid funding to states has been open-ended.

Health experts say allowing the waiver requests goes beyond the executive branch’s authority to change the program without approval from Congress.

“The point of these waivers is not for states to remake the program whole-cloth on a large-scale basis,” said Sara Rosenbaum, a health-policy expert at George Washington University who chairs a Medicaid group that advises Congress.

Rosenbaum noted that states received waivers for different purposes under the Obama administration.

In Iowa, state officials won the authority to limit non-emergency transportation. Indiana received approval to charge premiums and lock out enrollees with incomes above the federal poverty level if they fell behind on paying premiums.

“Now there is concern these more extreme measures would hurt enrollees’ access to care,” Rosenbaum said.

Three states seeking waivers today are home to three key GOP players in the Senate health debate: Majority Leader Mitch McConnell (Kentucky), Sen. John McCain (Arizona) and Vice President Mike Pence (Indiana).

If states add premiums, as well as work and drug testing requirements, the result would be fewer people enrolling and staying in Medicaid, said David Machledt, senior policy analyst for the National Health Law Program.

“How does that serve the purpose of the Medicaid program and what are the limits of CMS waiver authority?” he asked.

CMS is continuing to lighten the MACRA load after smaller and rural providers complained that their paucity of capital and other resources make complying with the reporting requirements too difficult.

Its latest proposed move would permit the exemption of small providers participating in the program by increasing the low-volume threshold to $90,000 or less in Medicare Part B charges or 200 or fewer Medicare patients annually. The original threshold was $30,000 in Medicare Part B charges or 100 Medicare patients. The agency believes that the move would let about 134,000 clinicians stay out of MIPS.

MACRA will replace Medicare’s Sustainable Growth Formula with a 0.5% annual rate increase through 2019. After that, CMS says, physicians are encouraged to shift to one of two Quality Payment Programs: 1) Merit-Based Incentive Payment System (MIPS) or 2): Alternative Payment Model (APM).

Most physicians are expected to enter the MIPS.

“We’ve heard the concerns that too many quality programs, technology requirements and measures get between the doctor and the patient,” said CMS Administrator Seema Verma. “That’s why we’re taking a hard look at reducing burdens. By proposing this rule, we aim to improve Medicare by helping doctors and clinicians concentrate on caring for their patients rather than filling out paperwork. CMS will continue to listen and take actionable steps toward alleviating burdens and improving health outcomes for all Americans that we serve.”

American Medical Association President David Barbe, M.D., praised CMS. “Not all physicians and their practices were ready to make the leap, and many faced daunting challenges. This flexible approach will give physicians more options to participate in MACRA and takes into consideration the diversity of medical practices throughout the country.”

Indiana expanded Medicaid under the Affordable Care Act in 2015, adding conditions designed to appeal to the state’s conservative leadership. The federal government approved the experiment, called the Healthy Indiana Plan, or HIP 2.0, which is now up for a three-year renewal.

But a close reading of the state’s renewal application shows that misleading and inaccurate information is being used to justify extending HIP 2.0.

This is important because the initial application and expansion happened on the watch of then-governor and now Vice President Mike Pence. And Seema Verma, who is President Donald Trump’s pick to lead the Centers for Medicare & Medicaid Services, helped design it. (Among other functions, CMS oversees all Medicaid programs.) So, states are watching to see if the approval of Indiana’s application is a bellwether for Medicaid’s future.

To get the program extended again, the Indiana Family and Social Services Administration has to prove to CMS that the experiment is working and that low-income people in the state are indeed getting access to care and using health care efficiently.

The key part of Indiana’s experiment requires low-income participants to make monthly payments. Advocates say this promotes recipients’ taking personal responsibility for their health care. But some health policy experts say the information provided by the state shows that the provision isn’t working as well as it should. Some examples:

The Claim: Most members are making regular payments to maintain coverage.

The Fact: A lot of people are missing the first payment.

The state’s application says that “over 92 percent of members continue to contribute [to their POWER accounts] throughout their enrollment.”

This claim is missing context. Here’s a primer on how HIP 2.0 works: Members can get HIP 2.0’s more complete coverage, the HIP Plus plan, by making monthly payments into a “Personal Wellness and Responsibility Account,” or POWER account.

If they don’t make the payments, there are penalties. If a recipient makes less than the federal poverty level — about $12,000 a year — they’re bumped to HIP Basic, a lower-value plan that requires copays and doesn’t include vision or dental insurance.

If a recipient is above the poverty line and misses a payment, they become locked out of coverage completely for six months.

The state’s claim that 92 percent of members make consistent payments is based on data in a report by the Lewin Group, a health policy research firm in Virginia that evaluated HIP 2.0’s first year.

But the Lewin report also says that when people sign up for HIP 2.0 they can be declared “conditionally enrolled,” which means they’re eligible but have not yet made their first payment.

According to the Lewin report, in HIP 2.0’s first year, about a third of people who were conditionally enrolled never fully joined.

“I don’t see those numbers being captured,” said Dr. David Machledt, senior policy analyst with the National Health Law Program, which advocates for low-income individuals. Machledt said the state should recalculate the figure to include those people, because it’s potentially an indicator that people are confused about how the program works or that they can’t afford the payments.

He added that the figure cited is based on the first year of HIP 2.0, and that the rate of losing coverage for missing payments has increased substantially since then.

Seema Verma, nominated by President Trump to lead the Centers for Medicare & Medicaid Services, told her confirmation hearing at the Senate Finance Committee that she’d consider clawing back parts of a rule set during the Obama administration that overhauled Medicaid managed-care programs.

She also said he doesn’t want to turn Medicare into a voucher program, an idea backed by Health and Human Services Secretary Tom Price, M.D., and thinks that rural healthcare providers shouldn’t face risk in alternative-payment models.

Ms. Verma said that one of her priorities would be re-assessing a rule issued under the Obama administration that ordered states to more vigorously oversee the adequacy of Medicaid plans’ provider networks and encouraged states to establish quality rating systems for health plans. She raised the question of whether these mandates have overly burdened the states financially.

On Medicaid, she said that “the status quo is not acceptable.”

“I’m endorsing the Medicaid system being changed to make it better for the people relying on it … and whether that’s a block grant or per capita cap, there are many ways we can get there.”

On Medicare, Modern Healthcare reported that Sen. Ron Wyden (D.-Ore.), the ranking Democrat on the Finance Committee, “said that she sounded like she wanted to keep Medicare a fee-for-service system.” The CMS under the Obama administration set goals to move Medicare away from fee-for-service, which was viewed as prone to abuse and fraud even as it has been very lucrative for physicians and hospitals and encourages much medically unneeded ordering of tests and procedures to maximize providers’ income.

But Ms. Verma denied Senator Wyden’s assertion and said that she supports Medicare focusing more on quality of care instead of volume.

Becker’s Hospital Review asked five figures in the healthcare industry for their reactions to President-elect Trump’s selection of Georgia Congressman Tom Price, M.D., to be secretary of the Department of Health & Human Services and Seema Verma, founder and CEO of health-policy consultancy SVC, to be administrator of the Centers for Medicare & Medicaid Services (CMS).

Ted Shaw, president and CEO of the Texas Hospital Association:

“Trump’s nominees to lead the national conversation on healthcare both have long careers in health policy. Their depth of understanding of complex health policy issues will be essential as Congress debates the future of healthcare reform and states continue their work to more effectively manage their Medicaid programs.”

Chip Kahn, president and CEO of the Federation of American Hospitals:

“The Federation of American Hospitals congratulates Chairman Tom Price on his nomination to be HHS Secretary.

“His decades of experience in the medical field make him uniquely qualified to confront the challenges facing patients, families, and caregivers. As chairman of the Budget Committee, he has proven to be a thoughtful, detail-oriented legislator who cares deeply about public policy. In light of expected legislative action on the ACA, it is noteworthy that his repeal and replace proposal recognizes the need to protect access to hospital care for millions of Americans by restoring deep Medicare and Medicaid cuts. ”

“President-elect Trump’s selection to lead CMS, Seema Verma, has a solid reputation as an effective innovator in assisting states in reforming and modernizing Medicaid programs for low-income Americans.”

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Donald W. Fisher, president and CEO of AMGA:
“AMGA offers its congratulations to Rep. Tom Price (R-Ga.) on his nomination to become the next secretary of the United States Department of Health and Human Services. From his experience as a practicing physician for nearly 20 years and his leadership on the House Ways and Means Committee, House Budget Committee, and the House GOP Doctors Caucus, he brings a wealth of clinical and policy expertise.”

Bruce Siegel, M.D., President and CEO of America’s Essential Hospitals:

Ms. Verma “offers a deep understanding of healthcare delivery and policymaking and can contribute an important state-level perspective on Medicaid, insurance and public health.”

Jodi Magee, president of Physicians for Reproductive Health:

“President-elect Trump’s plan to nominate Rep. Tom Price (R-Ga.) to be the Secretary of Health & Human Services (HHS) signals an alarming direction for reproductive health. Price has been a staunch opponent of women’s health and the Affordable Care Act during his time in Congress.

“Although Price has insisted that ‘patients, families and doctors should be making health decisions, not Washington, D.C.,’ he has directly contradicted that by supporting legislative efforts that interfere in the patient-doctor relationship. For example, Price has voted for anti-choice legislation that would harm our doctor’s patients, including bans on abortion, defunding Planned Parenthood and repealing the Affordable Care Act. We are deeply troubled that Price, though he is a physician, seems to disregard the strong medical evidence that access to safe and legal abortion and contraception protects not just a woman’s health, but that of her family and community.”